The Government has started the process of merging Mahanagar Telephone Nigam Limited (MTNL) with Bharat Sanchar Nigam Limited (BSNL). To facilitate the same, the centre has started the process of delisting Mahanagar Telephone Nigam Limited (MTNL) from the stock exchanges.
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As a first step, MTNL will be first delisted from the foreign exchange, according to a Financial Express Report, which cited people familiar with the matter. MTNL first listed its American Depository Shares (ADSs) in the New York Stock Exchange (NYSE) in 2001 that were taken down later and, consequently, listed on the OTCQX International market in 2013.
The merger process of BSNL and MTNL is expected to take around two years, with the proposal to merge the operational business of MTNL with BSNL. According to the proposed plan, this includes wireline, wireless, and the enterprise business, along with the operational assets of MTNL's telecom business. Furthermore, shares of MTNL will be delisted from Indian stock exchanges as well, with the Government acquiring 90% of the shares of MTNL.
MTNL is Divided into Three Parts for Merger
Mahanagar Telephone Nigam Limited (MTNL) will be divided into three parts per the merger plan. The first will comprise MTNL's operations, staff and operational assets. The second part will include MTNL's other assets and liabilities, including the spectrum MTNL holds. The third segment will consist of Mahanagar Telephone Mauritius (MTML) operations, which are currently operationally profitable. In addition, MTNL's liabilities will not be transferred to BSNL, and BSNL has appointed Deloitte as a consultant for the process.
"BSNL will take over staff and operational assets, and operations of MTNL Mauritius, whereas MTNL will continue to hold other assets and liabilities including the spectrum," a government official was quoted in the Report, who added that BSNL will not take over the spectrum available with MTNL.
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In July of last year, the Cabinet approved a revival package worth Rs 1.64 lakh crore to aid the struggling BSNL and MTNL. This was in addition to the Rs 69,000 crore rescue plan that was implemented in 2019. According to a recent report, BSNL has started getting equipment from the TCS-led consortium and is targeting to launch 4G in April.
